Increasing prices during COVID-19 (part 3).

In part 1 of this series, we explored how excessive price increases for high demand items as a result of COVID-19 might amount to unconscionable conduct under the Australian Consumer Law. Part 2 focussed on false or misleading representations made regarding the justification for a price increase.

This part 3 bulletin focuses on the new express prohibition against price gouging when re-supplying certain PPE and disinfectant goods during this extraordinary time.

Price gouging of essential goods.

On 31 March 2020, a new requirement against price gouging in relation to essential goods commenced. Price gouging is defined as:

• purchasing essential goods in a retail transaction on or after 30 January 2020; and
• supplying or offering to supply those goods:
  • between 18 March 2020 to 17 June 2020 (unless extended); and
  • for more than 120% of the purchase price, excluding transport and delivery costs.

Essential goods for these purposes are any of the following that, when worn, is capable of limiting the transmission of organisms to humans:

• disposable face masks
• disposable gloves
• disposable gowns
• goggles, glasses or eye visors

Alcohol wipes and hand sanitiser disinfectant goods are also deemed ‘essential’.

Importantly, this requirement does not apply to a supply of essential goods by a:

• manufacturer of those goods; or
• person who purchased those goods from wholesale channels.

What are the consequences?

For each contravention of this requirement a person may face:

• imprisonment for 5 years; or
• a fine of $63,000;

Law enforcement officers have also been empowered to require a person reasonably suspected of engaging or intending to engage in price gouging to:

• not dispose of or deal with the relevant essential goods; or
• surrender the relevant essential goods to a law enforcement officer.

Next steps.

The goods covered by this new requirement continue to be in short supply and high demand. Those sourcing these goods through retail channels should consider these provisions before deciding to re-supply them at substantially higher prices. A careful consideration of these restrictions may help avoid significant fines and potentially damaging enforcement action.

For details of all of our COVID-19 tips and updates, visit the Bespoke COVID-19 Hub.